Trading Gold Around Today's NFP
NFPs On Watch
Gold prices are looking a little better today with the futures market in green amidst the pullback in USD. However, the yellow metal has been well sold over the last four months and risks remain skewed towards further downside. Looking ahead today, the US jobs report will be the big focus ahead of the long weekend in the US.
Bullish Gold Scenario
On the numbers front, the market is looking for the headline NFP reading to print 114k, down from 172k prior, with wages to hold steady at 0.3% and the unemployment rate too at 4.3%. If such a drop in the NFP is confirmed this should see USD falling lower as traders pare back their Fed rate hike expectations this year. In this scenario, gold prices should rally. If we see a larger-than-expected fall, this would be the most bullish scenario for gold, weighing more sharply on rate hike expectations.
Bearish Gold Scenario
On the other hand, given the low estimate today against the prior NFP, there is plenty of room for an upside surprise. In this scenario rate-hike pricing should push higher, dragging USD back up while weighing on gold prices. The most bearish scenario for gold here would be a rise against the prior NFP, along with a drop in unemployment and a rise in wages. If seen, that would push USD firmly higher and likely see gold at fresh lows for the year.
Technical Views
Gold
For now, gold prices remain above the falling wedge lows and above the 3,898.03-level. Price is now fighting to get back above the 4,092.60 which bulls need in order to alleviate near-term bear risks and put focus ack on 4,389.24 next rather than 3,707.64 to the downside.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.